May 21 (Bloomberg) -- Canada’s housing slump has only just
begun and it is premature to say the market will have a so-called soft landing, said David Madani, an economist at Toronto-based Capital Economics Ltd.

“We don’t expect prices to rebound this year,” Madani
said today at the Bloomberg Economic Summit in Toronto.

Finance Minister Jim Flaherty has acted four times in the
past five years to make mortgage-lending rules more restrictive
amid concern that the Vancouver and Toronto markets were
overheating. Flaherty has said he welcomes a slowdown of
condominium construction in the two cities and has warned
consumers, who have a record debt-to-disposable-income ratio of
165 percent, not to become overextended.

Madani, a former senior economist at the Bank of Canada,
was the only person surveyed by Bloomberg News during the past
two years who consistently predicted the central bank wouldn’t
raise borrowing costs. Madani previously forecast home prices in
the country would fall by 25 percent in the next few years.

Canadian housing starts declined for the first time in
three months in April, led by multiple-unit projects, according
to Ottawa-based Canadian Mortgage & Housing Corp.

Work began on about 174,900 homes at a seasonally adjusted
annual pace in April, down 3.5 percent from March and 31 percent
below the year-ago pace.

Canadian home resale prices rose in April at the slowest
annual pace since 2009 as Vancouver posted declines, according
to the Teranet-National Bank Composite House Price Index.

The country’s mortgage changes didn’t have a “dramatic”
effect, Phil Soper, chief executive officer of Brookfield Real
Estate Services, said at the conference. Residential real estate
markets only have 6.5 to 6.8 months of inventory at the current
rate of sales, he said.

“All indications are we will have a soft landing” as
developers slow development of new projects, Soper said.